Thailand signs $40m trade deal with RI

Thailand signs $40m trade deal with RI

Dow Jones, Bangkok

Thailand expects more barter deals involving Thai rice and Indonesian goods after signing a memorandum of agreement Friday to exchange 200,000 metric tons of Thai rice for Indonesian goods worth US$40 million, Deputy Prime Minister Pitak Intrawitayanunt said.

Pitak and Thailand's Prime Minister, Thaksin Shinawatra, along with Indonesian Minister of Industry and Trade Rini MS Soewandi, were in Bangkok Friday as witnesses at the signing ceremony involving the exchange of 200,000 tons of 15 percent broken Thai rice with Indonesian goods comprising an aircraft, cargo train carriages and ammonia, which is used as a raw material for fertilizer.

As reported, the deal is valued at $40 million, with $16 million for an aircraft that will be used for agricultural purposes, $7 million for the train carriages and the balance for the ammonia. The selling price of the Thai rice isn't yet known.

Indonesia expects delivery of the Thai rice in July or August.

"Indonesia's rice import demand is quite big this year, possibly up to one million tons...(Indonesia) might also want to import more rice for a security stock" in addition to fulfill domestic consumption," Pitak said.

He said relevant authorities from the two countries will work things out to see whether they need to exchange more of the goods.

Pitak said he expects more exchanges, adding that transaction through exchanges instead of cash payment will help boost rice exports from Thailand to Indonesia.

Rini said Indonesia may want to import around 700,000 tons of rice this year. However, a more accurate estimate will be seen probably in the third quarter of this year, she told Dow Jones Newswires.

"We have to look at our harvest...we will see a clearer picture (of the need for rice imports) probably in the third quarter," Rini said.

Thailand is the world's largest rice exporter. It exported a record high of nearly 7.55 million tons in 2001.